US open: Stocks head south as FOMC meeting kicks off

Wall Street stocks were in the red at the bell as the Federal Reserve gets ready to kick off its two-day policy meeting in Washington DC.

As of 1540 GMT, the Dow Jones Industrial Average was down 0.62% at 32,529.68, while the S&P 500 lost 0.57% to 3,849.91 and the Nasdaq Composite came out the gate 0.67% weaker at 10,914.79.

The Dow opened 203.27 points lower on Tuesday, extending losses recorded in the previous session.

Tuesday's early losses come as market participants hold out hope that the central bank will offer some kind of sign that it will begin to ease its tightening stance in the coming months.

However, data out early on Tuesday dented hopes that the Fed will begin to make gentler rate hikes. The Federal Reserve is widely expected to reveal that it will hike interest rates by another 75 basis points at the conclusion of its meeting tomorrow.

On the macro front, the Institute for Supply Management's manufacturing purchasing managers' index fell from 50.9 in September to 50.2 in October for the slowest growth in factory activity seen since mid-2020's contraction.

Elsewhere, the S&P Global manufacturing PMI was revised higher to 50.4 in October from a preliminary reading of 49.9 - but was again the slowest growth in factory activity since the sector contracted in the second quarter of 2020.

Still on data, September's JOLTs job opening report revealed that the number of vacancies in the US unexpectedly rose by 437,000 to 10.72m last month, according to the Bureau of Labor Statistics, easily beating market expectations of 10.0m.

Finally, construction spending unexpectedly increased 0.2% month-on-month in September, according to the Census Bureau, bouncing back from a downwardly revised drop of 0.6% in August to beat market forecasts for a 0.5% drop.

In the corporate space, third-quarter revenues came in ahead of expectations at Uber on Tuesday after a surge in demand post-pandemic. Uber reported revenues of $8.3bn in the three months ended 30 September, ahead of forecasts of around $8.1bn and a 72% jump on the same period a year previously.

Drugmaker Pfizer raised full-year guidance on Tuesday after beating earnings and revenue expectations for the third quarter. Pfizer, which posted Q3 revenues of $22.6bn and adjusted earnings per share of $1.78, now expects earnings per share of $6.40-$6.50 for the year, up from its previous forecast of $6.30-$6.45.

Outside of earnings, Johnson & Johnson said on Tuesday that it has agreed to buy heart recovery specialist Abiomed in a $16.6bn deal. Under the terms of the transaction, J&J will make an upfront payment of $380.00 per share. Abiomed shareholders will also receive a non-tradeable contingent value right entitling the holder to receive up to $35.00 per share in cash if certain commercial and clinical milestones are achieved.

Reporting by Iain Gilbert at Sharecast.com